Microsoft announce price increases from April 2023 

Published: 6 April 2023

At the start of the year, Microsoft announced they would be introducing a 9% price increase across all of their products and services. The substantial rise came into effect on the 1st April 2023. These Microsoft price increases were announced under their new NCE (New Commerce Experience) pricing structure. Microsoft produced the NCE at the start of 2022 and has changed the way customers purchase licenses to make the process simpler and cost-effective. They have also announced a biannual pricing review. This allows customers to plan more effectively for any increases. This is good news for customers as they can include these changes in their budgets, improving visibility and forecasting for their business.

Why are these changes being made? 

Prices differ in different regions, with some countries being able to purchase products at nearly half the price of the US Dollar. To help counter this Microsoft is bringing regional prices closer to the Dollar. This alignment benefits customers globally by providing a more common pricing model. It’s Microsoft’s way of making a more transparent system.

How has licensing changed under NCE? 

In 2022, the new NCE offering saw the shift to a commercial seat-based offering. This changed the way businesses purchase and manage Microsoft licenses. With a commercial seat-based offering, subscriptions are purchased per user regardless of the number of devices they use for Cloud Services. Users can also increase the number of seats in their subscription at any time within their contract period. Cancellation has become a lot stricter. Microsoft now requires customers to remove any users within a 72-hour window of their contract starting.

This same time frame applies to the cancellation of contracts. NCE offers customers two contracts. Firstly, you can purchase an NCE monthly subscription This is a convenient option removing the need for long-term commitment allowing users to adjust their seat count every month. The second NCE offering is the 12-month subscription. Users can pay for this service in two ways, either monthly or in one go at the start of the contract. This offers customers flexibility as the previous model only offered a 12-month contract.

The NCE price increase affects which products?

  • Microsoft 365 Business Basic (20% Increase)
  • Microsoft 365 Business Premium (10% Increase)
  • Office 365 E1 (25% Increase)
  • Office 365 E3 (15% Increase)
  • Office 365 E5 (8.5% Increase)
  • Microsoft 365 E3 (12.5% Increase) 

How can I avoid the price increase? 

For those wondering if you can avoid this cost, the answer is yes. The recommendation is to sign up for a 12-month contract as this will avoid the bi-annual price reviews being proposed by Microsoft. The Annual commitment ultimately locks the price for that term. 

What do I get from the increased cost? 

Customers have been told that Microsoft will continue to invest in their products to help their customers improve operating costs and optimise their business performance. The increased pricing provides a common ground for customers and makes costs easily forecastable and predictable. 

Summary 

To summarise, Microsoft is increasing prices by 9% across all products from April 2023. The reason for this is to align pricing to the US Dollar, for a more transparent global service. Although prices are increasing in this instance it is worth noting that Microsoft also drops prices as part of the Bi-Annual pricing review. Against fluctuations of the US Dollar, this review will consider lowering pricing in some instances to help maintain global pricing alignment.

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